KT CEO to focus future growth on AI

By Kim Hyun-bin

KT CEO Koo Hyun-mo has been heavily investing and strategizing to find new growth engines for the firm, especially in the IT field, to increase profitability amid the fierce competition within the telecommunications market.

The company aims to create new growth engines in the areas of artificial intelligence (AI), big data and cloud computing, and it has been partnering up with major conglomerates and government entities.

KT CEO Koo Hyun-mo

In KT's recent business report, the company said the telecommunications market is already saturated and the company has reached its full growth potential in the voice communications market as well as high-speed internet services. To better adapt to the ever-changing industry, KT announced its vision to transform into an AI-focused firm.

According to ICT industry insiders, companies' IT structure in the Fourth Industrial Revolution era will mostly be based on data and software in which AI will become a core technology for digital transformation.

AI and big data technologies have already been embedded in diverse industries including manufacturing, finance, distribution, medicine and mobility.

KT's enhancement in its AI technologies has been derived from its business-to-business (B2B) platform. B2B IT services are largely divided into two sectors. The first is the AI and digital transformation (AI&DX) sector, utilizing AI, big data, cloud computing and blockchain; the other is business IT and solutions including system integration and video security.

By looking at KT's second-quarter total sales which only increased 0.6 percent from the previous year, the AI&DX sector has shown substantial growth recording 16 percent in sales during the cited period, evolving into one of the company's key cash cow business.

Since April, Koo has been working to solidify his company's structure and administrative capabilities through IT, as the global AI race has been intensifying. KT has an advantage as it could create greater synergy with its nationwide 5G network as well as GiGA internet and a solid fixed line and wireless network as its base to fuel future growth.

"Current ICT relies heavily on mobiles, but it is a matter of time until it switches to AI, big data and cloud computing businesses. The AI&DX digitalizes everything so there needs to be enough storage and companies will be in need of cloud services," a KT official said. "Telecom companies came late in the game compared to Google and Amazon, but they only provide the software ― we can offer all-in-one services including the network, storage and both fixed and wireless hardware."

The company launched its AI speaker GiGA Genie in 2017 and since then has acquired more than 2.5 million subscribers taking over the No. 1 seed in the market. It is currently focusing on developing AI not just for hotels, cars and homes but is in the process of expanding its AI technologies to customer service, robots and distribution as well as food and beverages.

The move is in line with the government's Digital New Deal initiative and great B2B opportunities for KT to expand its IT platform. To take advantage of the changes, the company has been busy initiating partnerships with local conglomerates in the AI field.

KT and Dongwon Group recently inked a deal to create an AI-based smart factory, logistics platform and packaging for Dongwon's fisheries products.

In February, KT led efforts to establish an AI One Team in partnership with Hyundai Heavy Industries Holding, Korea Advanced Institute of Science and Technology (KAIST), Hanyang University, and Korea Electronics and Telecommunications Research Institute (ETRI). The alliance focuses their collaboration on fostering AI technology and nurturing specialists. They aim to create an AI open ecosystem and more business opportunities.

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